Prudential share price: Group plans to break up £10bn annuities book

on Nov 6, 2017
Updated: Mar 11, 2020

Prudential (LON:PRU) is planning to break up its £10-billion British pensions annuities book into four parts, Sky News has revealed. The move could potentially see the blue-chip insurer leave its domestic market.

Prudential’s share price has slipped into the red in today’s session, having given up 0.56 percent to 1,857.50p as of 14:31 GMT, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing at 7,560.44 points, flat in percentage terms. The group’s shares have added more than 42 percent to their value over the past year, are up by some 14 percent in the year-to-date.

The Pru to break up annuities book

Sky News reported today that the Pru had started contacting potential buyers of chunks of its pension annuities business in the last few weeks. People briefed on the plans told the newswire that the FTSE 100 group had informed them that a £10-billion portfolio will be divided into four parcels of between £2 billion and £3 billion each. The packages being earmarked for sale reportedly comprise different profiles of assets to appeal to a range of buyers.

The sale process will be closely watched by investors for clues about the company’s longer-term ambitions about its presence in Britain. Earlier this year, the Pru unveiled plans to combine its M&G and Prudential UK & Europe businesses into one savings and investments provider, increasing speculation that the business was being prepared for a sale or a spin-off. 

Analysts on Prudential

Citigroup reiterated its ‘buy’ rating on the Pru last week, valuing the shares at 1,109p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average price target of 1,953.56p. The Pru is scheduled to hold an investor conference on November 16. 

As of 14:58 GMT, Monday, 06 November, Prudential plc share price is 1,861.50p.